When it comes to accounting and bookkeeping, it is very easy to make mistakes, especially if you aren’t very experienced. Unfortunately, even small mistakes can have big consequences when it comes to tax time, and the Australian Tax Office (ATO) won’t hesitate in penalising you.
It is therefore very important to make sure that you do everything in your power to follow the Australian tax rules, even if they seem complicated. There are a lot of different ways that you can do this. Four of the simplest things that you can do to make sure you are keeping up with your tax obligations include:
- Use an accountant!
If you are a new business owner or you don’t really understand what is required of you when it comes to keeping records for tax time, then you should consider at least speaking to an accountant. A decent accountant will know the Australian taxation system back to front, and they should be able to make sure that you don’t make any mistakes. If you are somewhat short on money and don’t think that you can afford to employ an accountant regularly, then at least speak to one once or twice to give you an idea of what you need to do.
- Keep good records:
When it comes to avoiding tax mistakes, good record keeping is absolutely essential. The first thing to do is to make sure that you understand what sort of things you have to keep records about. Make sure that you keep clear, organised records of everything from any wages you have paid to business costs and income. Remember, you can always throw something away later if it ends up being useless, but it is very hard to get something back once you have discarded it.
- Never estimate on your tax return:
The ATO pays very careful attention to the things that you put into your tax return. They actually know a lot of the things that they ask for before you actually give it to them, which means that they will pull you up if you estimate or make any mistakes on your tax return. Make sure that you always put exact figures in, and make sure that everything is correct.
- Pay attention to any capital gains you have:
A lot of people make the mistake of either forgetting about or incorrectly reporting any capital gains that they have had. If your business has made any capital gains this year from the sale of investments, make sure that you include these in your tax return.
If you are worried about making mistakes when it comes to accounting and completing your tax return, then consider speaking to a qualified accountant. It is better to spend a little extra money to do things right than to have to pay fines or penalties from the ATO later.